Short-term Lets: Regulation

Rachael Maskell Excerpts

Thursday 12th September 2024 Westminster Hall

[Rachael Maskell (York Central) (Lab/Co-op)]

It is always a pleasure to see you in the Chair, Mrs Harris. I congratulate my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on an outstanding presentation of all the issues that we have been wrestling with for so long. I spent six months on the Levelling-up and Regeneration Bill fighting for the licensing of short-term holiday lets. We only managed to achieve a registration scheme and a consultation on a change in use class. As my hon. Friend said, that would grandfather the rights of existing short-term holiday lets, locking in the inequity that we already see in our communities.

I have around 2,000 short-term holiday lets in my own constituency and I know the challenges that they bring as housing demand outstrips supply. As a result we have a serious housing crisis, not least where we have clusters and people lack access particularly to family homes. Short-term holiday lets break up communities and distort the normal community life that we have come to expect.

We need a Bill—I have one I prepared earlier, which I presented to the House in 2022; I believe it still stands today. I will talk the Minister through my Bill, which has a licensing scheme rather than a registration scheme for the conversion of domestic properties into short-term holiday lets in exchange for a fee, differentiated of course if somebody lets out a single room in their own property.

Local authorities could issue fines or remove licences if conduct was criminal or if antisocial behaviour continued in the home. Also, a licensing scheme would ensure proper standards in the homes, with environmental controls, health and safety standards and electric and gas checks. That would bring short-term lets level with the traditional B&B sector so that there was no inequality there. It would also restrict the number of days that they can operate. Local authorities would be able to determine the standards within which they practised, giving them control in local communities.

The Bill was drawn from best practice across the world where schemes have already been tried, tested and tweaked, so we know that it would operate well. It would improve safety, the environment and communities. The licence would be renewed every three years to balance the administrative burdens with the need for inspection. It would be self-funding, with no extra cost to local authorities. Every short-term holiday let would have a named person who could be contacted and who would be liable for the management of the property. Also, the licence would say how many people could stay at the property so that there was not an overcrowding problem.

We know that as Friday night comes and the wheelie trolleys go down the streets, neighbourhoods are in fear because they know the parties are about to arrive. Well, we can get on top of that and also the criminality. These places have been used as pop-up brothels, for child exploitation and as drug dens. By ensuring that a proper scheme was in place, we could get on top of that, too. It would help the industry, landlords, visitors, and most of all communities and would regenerate our housing for the purpose for which it was built.

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[Rushanara Ali]

I am grateful to my hon. Friend for his intervention. It is important that we look at what can be done as part of that exercise. He will appreciate the point I made about the new Government needing to take stock of what is working, where the good examples are and what we can draw on. The register is part of that, and I look forward to ensuring that colleagues’ insights and contributions are taken into account.

[Rachael Maskell]

Will my hon. Friend take a look at my Bill, which proposes a licensing scheme but allows local authorities to determine some of the parameters necessary to control the number of short-term lets in their local area, including control zones, so that we do not see a real expansion of such lets in precious places such as York?

[Rushanara Ali]

I thank my hon. Friend for the offer on the Bill that she prepared earlier, and I know that officials listening to this debate will consider the range of suggestions and proposals that colleagues are making today.

We know that many local authorities are eager for the registration scheme to be operational as soon as possible. We share this view and officials are currently working at pace to operationalise the scheme. The Department for Culture, Media and Sport is now in the initial phase of a digital development process for the register, which will allow us to test and refine the possible options for design and delivery of the scheme. We will factor into that process the points made today and will update the House in due course.

As hon. Members have highlighted, London is unique in England in having certain powers regarding short-term lets. Since 2015, primary legislation has provided that homes in London that are liable for council tax may be let for temporary sleeping accommodation for up to 90 nights in a calendar year. Planning permission is required to let for more than that. However, as has already been pointed out today, in practice local authorities in London report that this limit is difficult to apply and enforce, due to a lack of data on addresses, ownership and the number of nights that properties are let for, and because of limited enforcement capacity. Points were well made in this debate about other parts of the country that do not have the London scheme.

We recognise that more needs to be done to ensure that authorities in London have the tools they need to enforce the limit. As we design the short-term lets register and consider future policy, we will keep in mind the uniqueness of each area of our country and in particular the interactions with the existing legislation that applies to London.

I recognise that the current taxation of short-term lets can be seen to incentivise such use. The Government have confirmed that we will abolish the furnished holiday lettings tax regime from April 2025, which will remove the tax advantages that landlords offering short-term holiday lets have over those providing standard residential properties.

At the end of July, the Government took concrete steps to abolish the regime by publishing draft legislation, which includes transitional arrangements to help landlords to adjust to the change. Councils will also be able to charge a council tax premium of up to 100% on second homes from April 2025. It is for councils themselves to decide whether to charge such a premium in their area.